Litigation Release No. 17918 / January 7, 2003

The Securities and Exchange Commission announced today that it has filed a complaint against James L. George, Paul E. Brodhagen and Michael J. Wright for their actions as salesmen in a multimillion-dollar, nationwide, prime bank type and other securities fraud. This matter is a companion case to SEC v. Louis M. Lazorwitz, J. Charles Reives, and Tri-Star Investment Group, L.L.C. a/k/a Tri-Star Investment Group, Defendants, and Lazor, Ltd., Relief Defendant, Civil Action File No. 1:02-CV-0112-HTW (N.D. Ga.) in which the Commission sued the promoters in the same securities fraud. The recent complaint charges that George, a North Carolina resident, Brodhagen, a Nebraska resident, and Wright, a Georgia resident offered and sold unregistered securities in the fraudulent Tri-Star Investment Group, L.L.C. ("Tri-Star") scheme to more than 200 investors, and that the defendants made misrepresentations and omissions of material fact to investors concerning, among other things, the use of investor funds and expected returns.

The Commission's complaint alleges that George, Brodhagen and Wright, while acting as Tri-Star Facilitators, fraudulently offered and sold unregistered securities, as part of a larger scheme in which Lazorwitz, Reives and Tri-Star sold securities interests in Tri-Star to over 900 investors in at least 35 states, and to raise over $15 million. Tri-Star, through Lazorwitz and Reives, initially represented that Tri-Star would invest in bank debentures and later claimed that it might invest in other international trade opportunities. The complaint also alleges that George, Brodhagen and Wright offered and sold Tri-Star directly and led investors to expect profits of 20% per month in so-called 13-month trading programs, after an initial 90-day waiting period, but that the defendants lacked a reasonable basis to project such profits.

The Commission's complaint charges George, Brodhagen, and Wright with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder, and with violations of the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The complaint also charges George, Brodhagen and Wright with violations of the broker-dealer registration provisions of Section 15(a) of the Exchange Act. The Commission's complaint seeks orders of permanent injunction, disgorgement of ill-gotten gains along with prejudgment interest, and civil penalties against the defendants.